TIDMPUAL
RNS Number : 6876G
Puma Alpha VCT PLC
27 November 2020
Puma Alpha VCT plc
Interim Report
For the period ended 31 August 2020
Officers and Professional Advisers
Directors Auditor
Egmont Kock (Chairman) RSM UK Audit LLP
Richard Oirschot Chartered Accountants
Michael van Messel 25 Farringdon Street
London EC4A 4AB
Secretary
Paul Frost Sponsors and Solicitors
Howard Kennedy
Registered Number No 1 London Bridge
11939975 London SE1 9BG
Registered Office Bankers
Cassini House The Royal Bank of Scotland plc
57 St James's Street 2 1/2 Devonshire Square
London London
SW1A 1LD EC2M 4BA
Investment Manager and Administrator VCT Tax Advisor
Puma Investment Management Limited PricewaterhouseCoopers LLP
Cassini House 1 Embankment Place
57 St James's Street London WC2N 6RH
London
SW1A 1LD
Custodian
Registrar Pershing Securities Limited
SLC Registrars 1 Canada Square
Elder House London
St. Georges Business Park E14 5AL
Weybridge
Surrey
KT12 1RZ
HIGHLIGHTS
- Strong performance within the portfolio leading to an increase in NAV
- NAV returning to above 100p per share
- Significant portion of NAV still held as cash to exploit the "new normal"
CHAIRMAN'S STATEMENT
Your Board is pleased to present the first half-yearly report
for Puma Alpha VCT plc ('the Company') for the period to 31 August
2020.
Fundraising
We are happy to report that at the period end the Company had
raised GBP5.9 million and since the period end a further GBP1.7
million has been raised. The Company's shares were admitted for
listing on the premium market of the London Stock Exchange in June
2020.
Puma Alpha VCT was the largest new VCT on the market at the end
of the 2019/20 tax year and has continued to raise into the new tax
year despite the significant market disruption arising from
Covid-19 and its knock-on effects.
Despite this being a time of great uncertainty, the Company's
offer of tax advantaged investment into well-run, innovative,
scale-up businesses is chiming with investors. A particularly
attractive feature of the Company is that it is still young. As a
relatively new VCT, it can respond with agility to the current
climate and position itself well via future investment into
businesses that have proven they can withstand the challenges and
benefit from the opportunities presented by the current economic
environment.
We believe its sector agnostic investment mandate and ability to
co-invest with other Puma funds has also resonated with investors.
This combination delivers portfolio diversification and enables
swifter deployment of funds, giving investors access to a wider
pool of investments.
Investment Portfolio
We are pleased to report that, despite only having been launched
in January 2020, the Company had made three qualifying investments
up to period end (alongside other Puma managed funds) and has made
a subsequent investment post period. These investments are:
GBP475,000 into British automotive engineering firm Dymag;
GBP719,000 into cycling apparel business Le Col and GBP600,000 into
health and wellness engagement business Tictrac. These were
followed post year end by a GBP950,000 investment into human
resources digital platform provider, MyKindaCrowd. Given the impact
of Covid-19, this is good progress.
Within the portfolio, Le Col in particular has recorded an
impressive year of trade and has contributed to an increase in the
Net Asset Value ("NAV") of the company. That, together with the
significant portion of its NAV held in cash, leaves the Company
well positioned to continue building a compelling portfolio of
'post-Covid' opportunities, without the large legacy portfolios
that many other VCTs will be managing through the current crisis
and for the foreseeable future.
At the time of writing, we are encouraged by the flow of
prospective qualifying investments which are under consideration by
the Manager, including through the Covid-19 crisis so far. The
investment team is in execution phase with three further potential
investments so we take comfort that we will continue to make good
progress in executing our investment strategy and, of course, in
meeting our qualifying deployment tests as a VCT.
Net Asset Value
The Company's NAV stood at 104.35p at the period end of 31
August 2020. The Company's profit for the period was GBP451,000,
driven by the upwards revaluation in Le Col, mentioned above. The
Company has not to date held listed equities or other liquidity
management tools outside cash, so has not suffered from the
associated volatility. Allocation of non-qualifying holdings will
continue to be considered by the Investment Manager as the economic
outlook and global policy response to the Covid-19 crisis continue
to evolve.
VCT qualifying status
PricewaterhouseCoopers LLP ("PwC") provides the Board and the
Investment Manager with advice on the ongoing compliance with HMRC
rules and regulations concerning VCTs and has reported no issues in
this regard for the Company to date. PwC and other specialist
advisors will continue to assist the Investment Manager in
establishing the status of potential investments as qualifying
holdings. PwC will continue to monitor rule compliance and
maintaining the qualifying status of the Company's holdings in the
future.
Outlook
The critical thing now is to ensure Puma Alpha VCT remains
well-positioned as we continue in our current environment.
Notwithstanding the ongoing uncertainty caused by the Covid-19
pandemic and the effect of subsequent government measures on many
SMEs, we continue to look to the future with confidence. As a
series, the Puma VCTs have invested into 47 qualifying companies.
The Manager's extensive experience has proved particularly valuable
in helping the Company's portfolio businesses navigate the current
challenges and position themselves to take advantage of growth
opportunities that are arising.
The UK also benefits from an active SME ecosystem and the
Manager has a strong reputation as a provider of capital to
well-managed, later-stage businesses. Furthermore, despite pressure
on the banks for more activity in support of SMEs, bank lending
remains very challenging for even the best small businesses. This,
coupled with the institutional support that the Manager is able to
offer its portfolio companies makes - in our view - an equity offer
from the Company even more compelling.
In addition, as a relatively new VCT, the Manager has greater
agility in scanning the market for businesses that have
demonstrated resilience during unprecedented levels of turbulence -
enabling it to be opportunistic in seeking the best possible
scenarios for investment. We therefore consider the Company to be
strongly positioned to assemble a portfolio capable of delivering
attractive returns to shareholders.
Egmont Kock
Chairman
27 November 2020
INVESTMENT MANAGER'S REPORT
Introduction
During the period covered by these interim results, and
following, economic activity has continued to be dominated by the
policy response to the Covid-19 pandemic. These are unprecedented
times that have disrupted personal and working life for almost
everyone. Critically they have also disrupted consumption patterns,
which has the potential to lead to significant shifts in market
share from incumbents to newer players.
Since the pandemic's onset we have drawn on our longstanding
experience to support our management teams. By leveraging our own
advisers, we were able to provide specialist guidance on key topics
such as employment law, UK government support schemes and
cyber-security. This enabled management teams to focus on more
immediate developments arising from the pandemic, with the hopes of
minimising its negative effects where possible.
Since the release of the Company's full year report and
accounts, we have continued to work with our portfolio companies to
protect shareholder value but have also, increasingly looked to new
opportunities. As ever, the ability to innovate is key and a number
of our portfolio management teams have proven themselves adept at
expanding or pivoting their offering to meet new needs arising from
the crisis.
The Company's objective is to provide funding to growing SMEs in
the UK, aiming to give investors exposure to quality operating
businesses with strong management teams in sectors providing
structural support for growth. Through its sector agnostic mandate,
it seeks to provide funding to assist the growth of a diversified
portfolio of investments, which should allow the Company to capture
significant upside from individual positions but also provide
resilience in the event of an economic downturn. Having been put to
the test as a result of the pandemic, this approach has proven
reassuringly successful and we remain positive in our outlook for
the Company.
Investments
Qualifying Investments
Dymag Group Limited - High performance wheel manufacturer
In January 2020, the Company invested GBP475,000 (as part of a
GBP1.2 million investment, alongside other Puma funds) into Dymag
Group Limited, the British designer and manufacturer of carbon
hybrid automotive wheels. Dymag is a British designer and
manufacturer of carbon-fibre car and motorbike wheels. These are
high end, lightweight wheels for performance use. Dymag continued
to operate throughout the first Covid-19 lockdown with a skeleton
staff, the remaining staff either working from home or
furloughed.
Immediately pre-Covid-19, the global market for carbon
automotive wheels was growing strongly, with several major
production programmes announced from larger Original Equipment
Manufacturers ("OEMs"). During the crisis, and in line with the
rest of the automotive sector, the company's revenue levels were
impacted, with aftermarket automotive wheel sales in particular
being below forecast levels.
The longer-term prospects of the technology and its adoption by
mainstream car manufacturers remain highly promising. Dymag has
enjoyed strong customer engagement over the summer and has entered
into agreements to be featured on a number of upcoming hyper- and
super-car projects. On 10(th) October 2020, Dymag wheels were used
on an SSC Tuatara car to set a new land-speed record for production
cars, reaching 331mph.
The focus will now be on 2021 sales to OEMs and the
aftermarket.
Tictrac Limited - Health Engagement Platform
In March 2020, the Company invested GBP600,000 (as part of a
GBP5 million investment, alongside other Puma funds) into Tictrac
Limited. Tictrac offers an advanced health and wellness app for
insurance companies and corporate clients to provide to their user
bases. The app integrates data from wearable technology, delivering
it to end users in a digestible format to drive up levels of
engagement and increase customer loyalty.
Tictrac has an impressive client base that ranges from globally
recognised insurance providers such as Aviva, Allianz and
Prudential to government health bodies, having established strong
relationships across the industry. Created in 2010, its founders
have assembled a high-quality management team to propel the
business' future growth.
The Covid-19 pandemic has placed renewed emphasis on employers
to focus on the health and wellbeing of all employees. While
continuing to work with its existing clients on roll-out, during
the crisis the company has offered its employee wellbeing platform
on a free trial basis to UK employers to support their workforce, a
number of which have now converted to paying clients.
Le Col Holdings Limited - Sports Apparel
In late 2019 and early 2020, the Company invested a total of
GBP719,000 (as part of a GBP4.85 million investment, GBP2.5 million
of which came as a second tranche, alongside other Puma funds) into
Le Col Holdings Limited, a leading British performance cycling
clothing brand, founded by ex-professional cyclist Yanto Barker. Le
Col uses the latest technology to provide high-performance kit with
a quality formerly reserved for professionals.
During Puma's period of hold, Le Col's growth has been
significant. In 2018, its revenues more than doubled and online
sales grew six-fold, year-on-year, and it exported product to
approximately 50 countries worldwide. In 2019, revenue grew by 70%.
The investment has helped the company continue to develop its
marketing strategy, through which it has driven growth in online
sales, supported retail partnerships with e-tailers such as Wiggle
and build high-profile partnerships including sponsorship of World
Tour cycling's Team Bahrain McLaren. Among these numerous
partnerships, the brand has gained further recognition through its
collaboration with Sir Bradley Wiggins, who developed a signature
range, Le Col by Wiggins, which has gone from strength to
strength.
Since then, Le Col has also secured further partnerships
including with Eurosport and Colnago. With increased focus on
exercise during the Covid-19 crisis, online sales have continued to
grow very strongly. Stock was carefully manged as the company's
Italian factory closed briefly during the first lockdown, but no
material interruptions were experienced by customers. The company
recently won 'Best Leisure, Fitness & Outdoor Ecommerce' at the
eCommerce Awards 2020. Le Col is now building on the marketing
insights gained during this period and considering options for
further expanding its market reach. The Company has increased the
carrying value of its holding, generating an unrealised gain of
GBP598,000 in the period.
Post year end the Company made a further investment as
follows:
MyKindaCrowd Limited - Human Resources Technology
In November 2020, the Company invested GBP950,000 (Puma funds
had previously invested GBP2.75 million) into MyKindaCrowd,
(trading under the name MyKindaFuture ("MKF")). MKF is the UK's
largest emerging talent specialist whose clients include BT,
Deloitte, Cisco and Burberry. Focusing its recruitment on young
people, MKF aims to help students from a range of backgrounds
develop employability skills and succeed in the workplace, whilst
also supporting employers with their recruitment needs - from work
experience and apprenticeships through to graduate programmes.
Investment Strategy
We are pleased to have invested the Company's funds in four
diverse businesses to date and we hope to further diversify the
portfolio and exploit the post-Covid investment environment over
the coming months. We remain focused on generating strong returns
for the Company, whilst balancing these returns with maintaining an
appropriate risk exposure. Overall, we are confident that the
Company is well positioned to deliver attractive returns to
shareholders in the medium to long term.
Puma Investment Management Limited
27 November 2020
Income Statement (unaudited)
For the period ended 31 August 2020
Period ended Period ended
31 August 2020 29 February 2020
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain on investments - 598 598 - 178 178
- 598 598 - 178 178
-------- -------- -------- -------- --------
Investment management
fees 4 (14) (42) (56) (2) (6) (8)
Other expenses (91) - (91) (36) - (36)
(105) (42) (147) (38) (6) (44)
-------- -------- -------- -------- --------
Profit/(loss) before
taxation (105) 556 451 (38) 172 134
Taxation - - - - - -
Profit/(loss) and
total comprehensive
income for the period (105) 556 451 (38) 172 134
======== ======== ======== ======== ======== ========
Basic and diluted
Profit/(loss) per
Ordinary Share (pence) 2 (1.90p) 10.05p 8.15p (7.63p) 34.57p 26.94p
======== ======== ======== ======== ======== ========
The total column of this statement is the profit and loss of the
Company. All revenue and capital items in the above statement
derive from continuing operations. No operations were acquired or
discontinued in the period.
Balance Sheet (unaudited)
As at 31 August 2020
As at As at
31 August 29 February
Note 2020 2020
GBP'000 GBP'000
Fixed Assets
Investments 6 2,570 1,103
----------- -------------
Current Assets
Prepayments 96 585
Cash 3,575 2,455
----------- -------------
3,671 3,040
Creditors - amounts falling
due within one year (97) (206)
Net Current Assets 3,574 2,834
----------- -------------
Net Assets 6,144 3,937
=========== =============
Capital and Reserves
Called up share capital 59 40
Share premium account 5,500 3,763
Capital reserve - realised (48) (6)
Capital reserve - unrealised 776 178
Revenue reserve (143) (38)
Total Equity 6,144 3,937
=========== =============
Net Asset Value per Ordinary
Share 3 104.35p 98.27p
=========== =============
Cash Flow Statement (unaudited)
For the period ended 31 August 2020
Period ended Period ended
31 August 29 February
2020 2020
GBP'000 GBP'000
Operating activities
Profit after tax 451 134
Gain on investments (598) (178)
Decrease/(increase) in debtors 489 (13)
(Decrease)/increase in creditors (109) 43
Net cash outflow from operating
activities 233 (14)
------------- -------------
Cash flow from investing activities
Purchase of investments (869) (925)
Net cash used in investing activities (869) (925)
------------- -------------
Cash flow from financing activities
Net proceeds from issue of ordinary
shares 1,756 3,381
Proceeds from issue of redeemable
preference shares - 13
Net cash generated from financing
activities 1,756 3,394
------------- -------------
Net increase in cash and cash
equivalents 1,120 2,455
Cash and cash equivalents at the
beginning of the period 2,455 -
Cash and cash equivalents at the
end of the period 3,575 2,455
============= =============
Statement of Changes in Equity (unaudited)
For the period ended 31 August 2020
Called Share Capital Capital
up share premium reserve reserve Revenue
capital account - realised - unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 11
April 2019 - - - - - -
Shares issued in
the period 40 3,966 - - - 4,006
Expenses of share
issues - (203) - - - (203)
Total comprehensive
income for the period - - (6) 178 (38) 134
Balance as at 29
February 2020 40 3,763 (6) 178 (38) 3,937
Shares issued in
the period 19 1,863 - - - 1,882
Expense of share
issue - (126) - - - (126)
Total comprehensive
income for the period - - (42) 598 (105) 451
Balance as at 31
August 2020 59 5,500 (48) 776 (143) 6,144
========== ========= ============ ============== ========= ========
Notes to the Interim Report
For the period ended 31 August 2020
1. Accounting Policies
The financial statements have been prepared under the historical
cost convention, modified to include the revaluation of fixed asset
investments, and in accordance with applicable Accounting Standards
and with the Statement of Recommended Practice, "Financial
Statements of Investment Trust Companies and Venture Capital
Trusts" ("SORP") and in accordance with the Financial Reporting
Standard 102 ("FRS102").
2. Return per Ordinary Share
The total profit per share of 8.15p is based on the profit for
the period of GBP451,000 and the weighted average number of shares
in issue as at 31 August 2020 of 5,532,190 calculated from the date
of the first receipt of proceeds from the issue of ordinary share
capital.
3. Net asset value per share
As at As at
31 August 29 February
2020 2020
Net assets 6,144,000 3,937,000
Shares in issue 5,887,851 4,006,472
Net asset value per share
Basic 104.35p 98.27p
Diluted 104.35p 98.27p
4. Management fees
The Company pays the Investment Manager an annual management fee
of 2% of the Company's net assets. The fee is payable quarterly in
arrears. The annual management fee is allocated 75% to capital and
25% to revenue.
5. Financial information provided
The financial information for the period ended 31 August 2020
has not been audited and does not comprise full financial
statements within the meaning of Section 423 of the Companies Act
2006. The interim financial statements have been prepared on the
same basis as will be used to prepare the annual financial
statements.
6. Investment portfolio summary
Valuation
as a % of
Valuation Cost Gain/(loss) Net Assets
As at 31 August 2020 GBP'000 GBP'000 GBP'000
Qualifying Investments
Le Col Holdings Limited 1,495 719 776 24%
Dymag Group Limited 475 475 - 8%
Tictrac Limited 600 600 - 10%
Total Qualifying Investments 2,570 1,794 776 42%
---------- -------- ------------ ------------
Total Investments 2,570 1,794 - 42%
Balance of Portfolio 3,574 3,574 - 58%
Net Assets 6,144 5,368 776 100%
---------- -------- ------------ ------------
Of the investments held at 31 August 2020, all are incorporated
in England and Wales.
Copies of this Interim Statement will be made available on the
website:
http://www.pumainvestments.co.uk/pages/view/investors-information-vcts
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END
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